Study Resources (Accounting)

Learning Objective 10-1
1) If an installment note payable has installments due within a year, the entire note is treated as a current liability.
2) Amounts owed for products or services purchased on account are contingent liabilities.
3) Unearned revenue is an obligation to provide goods or services to the customer.
4) Notes.

38) On October 1, 2012, Archer Sales borrows $100,000 by signing a note payable. The note is for 6 months and bears interest at a rate of 9%. Please provide the journal entry to accrue interest expense at the end of 2012.
39) On October 1, 2012, Archer Sales borrows $100,000.

39) Job Sales sold a truck in exchange for $1,000 cash plus a forklift. The truck was originally purchased for $36,000, and had accumulated depreciation of $30,000 at the time it was sold. The forklift was valued at $4,000. Please provide the journal entry for this transaction.
40) Job Sales traded.

Learning Objective 8-1
1) The two major types of receivables are accounts receivable and notes receivable.
2) The creditor is the entity that signs a note.
3) The two major types of receivables are interest receivable and taxes receivable.
4) Notes receivable are usually longer in term than accounts receivable.
5) Which of the.

11) What is the total interest on a 3-month, 9% note for $32,000?
A) $720
B) $1,440
C) $2,880
D) $460
12) What is the maturity value of a note?
A) The principal amount minus interest due
B) The principal amount plus interest due
C) The face amount of the note
D) The principal amount times the interest rate
13).

21) ABC Company signed a 5-year note payable for $80,000 at 9% annual interest. What is the interest expense for December 31, 2013 if the note was signed on May 1, 2013?
A) $7,200
B) $4,800
C) $2,400
D) $36,000
22) ABC signed a 5-year, 9% note payable for $80,000 on May 1, 2012. Which.

5) ABC receives a $9,000, 8%, 2-month note. The maturity value is:
A) $720.
B) $120.
C) $9,120.
D) $9,720.
6) Tarheel Services is holding a note receivable from one of its customers, and wishes to collect the cash earlier than the maturity date of the note. The note is for $1,000 and carries a.

19) In which of the following periods should the expense for warranty costs be recorded?
A) The period when the product is sold
B) The period when the product is repaired or replaced
C) The period when cash is paid to repair or replace the product
D) The period when cash is collected for.

11) A company reports Net accounts receivable of $107,460 on its December 31, 2013 balance sheet. The Allowance for uncollectible accounts has a credit balance of $3,200. What is the balance in Accounts receivable?
A) $104,260
B) $107,460
C) $105,860
D) $110,660
12) Assets are listed on the balance sheet in order of liquidity. Which.

44) Dawson Services purchased a van on January 1, 2012, for $56,000. It has an estimated life of 5 years, and an estimated salvage value of $6,000. Dawson uses straight-line depreciation. At the end of 2014, Charterhouse revised the estimated life of the asset from 5 years to 8 years. .

11) Which of the following asset categories would include fencing?
A) Machinery and equipment
B) Land improvements
C) Buildings
D) Land
12) Which of the following asset categories would include the cost of clearing land and removing unwanted buildings?
A) Land
B) Buildings
C) Land improvements
D) Machinery and equipment
13) Which of the following is NOT a characteristic of.

4) Companies that use GAAP accounting will prefer the use of the direct write-off method.
5) Archer Company and Zorro Company both have significant amounts of accounts receivable at any time, and both experience uncollectible accounts from time to time. Archer uses the percent-of-sales method to account for uncollectible accounts and.

28) At the beginning of 2014, Mark's sales had the following ledger balances:
During the year there were $450,000 of credit sales, $460,000 of collections, and $3,700 of write-offs. At the end of the year, Mark's adjusted for uncollectible account expense using the percent-of-sales method, and applied a rate, based.

8) Which of the following entries would be used to account for uncollectible receivables using the allowance method?
A) Allowance for uncollectible accounts is debited and Uncollectible accounts expense is credited.
B) Uncollectible accounts expense is debited and Allowance for uncollectible accounts is credited.
C) Uncollectible accounts expense is debited and Accounts receivable.

31) On June 20, 2013, Parker Services received $2,400 in advance from a customer for one month's service. The journal entry to record the receipt of cash would be which of the following?
A) Debit Unearned service revenue $2,400 and credit Cash $2,400.
B) Debit Cash $2,400 and credit Service revenue $2,400.
C).

18) The following information is from the 2013 records of Armadillo Camera Shop:
Accounts receivable, December 31, 2013
$20,000 (debit)
Allowance for uncollectible accounts, December 31, 2013
prior to adjustment
600 (debit)
Net credit sales for 2013
95,000
Accounts written off as uncollectible during 2013
7,000
Cash sales during 2013
27,000
Uncollectible accounts expense is estimated by the aging-of-accounts-receivable method. Management.

31) Corey Sales sold its old office furniture for $1,100. The original cost was $8,000 and at the time of sale, it had accumulated depreciation of $7,000. What was the effect of the transaction?
A) Gain of $100
B) Gain of $400
C) Loss of $1,600
D) Loss of $600
32) Albatross Services scrapped a.

14) A company uses the direct write-off method to account for uncollectible receivables. Which of the following is included in the entry to write off an uncollectible account?
A) A debit to Uncollectible account expense
B) A debit to the customer's Account receivable
C) A credit to the Allowance for uncollectible accounts
D) No.

11) Which of the following is the amount capitalized as goodwill?
A) The excess of the cost of an acquired company over the sum of the market value of its net assets
B) The excess of the cost of an acquired company over the sum of the book value of its assets
C).

34) On March 1, 2012, Bayonne Services made a loan to one of its officers. The officer signed a 6-month note for $4,000 at 8%. Bayonne generally accrues interest at year-end only, so at the time the note matured, Bayonne had not accrued any interest revenue. On September 1, when.

21) Roberts Construction Company paid $40,000 for equipment with a market value of $45,000. At which of the following amounts should the equipment be recorded?
A) $45,000
B) $40,000
C) $42,500
D) $5,000
22) A company purchased a used machine for $80,000. The machine required installation costs of $8,000 and insurance while in transit of.

21) On September 1, 2013, Adirondac Marine Supplies made a loan to one of its customers. The customer signed a 6-month note for $1,500 at 10%. How much interest revenue did Adirondac earn over the life of the note?
A) $150
B) $75
C) $25
D) $50
22) On September 1, 2013, Adirondac Marine Supplies.

21) Which of the following is TRUE of days' sales in receivables?
A) Days' sales in receivables measures how many days it takes to order and receive inventory.
B) Days' sales in receivables measures how frequently during the year the accounts receivable are collected.
C) Days' sales in receivables measures how many days.

42) Charter Services sells a service plan for commercial computer maintenance. The price is $1,200 per year, paid in advance. On December 1, 2013, Charter sells a service plan to a new customer for cash. Please provide the journal entry to record the adjustment needed on December 31, 2013.
Learning Objective.

Learning Objective 9-3
1) A loss on the sale of a plant asset is recorded when the sales price exceeds the book value.
2) If assets are junked before being fully depreciated, there is a loss equal to the book value of the asset.
3) A loss occurs on the exchange of.

34) An asset costs $80,000 and has a salvage value of $7,000. It has a four-year life. Using double-declining-balance depreciation, Year 2 depreciation would be:
A) $15,000.00.
B) $15,437.50.
C) $20,000.00.
D) $18,250.00.
35) A factory has a machine costing $76,000. It has a 5-year life and an estimated capacity of 160,000 parts. The salvage.

30) On October 1, 2012, Allen Jewelry Company accepted a 4-month, 10% note for $2,400 in settlement of an overdue account receivable. If the company accrues interest at year-end only, please provide the journal entry needed at year-end.
31) On October 1, 2012, Allen Jewelry Company accepted a 4-month, 10% note.

28) In 2010, Azimuth Company purchased a small business for $500,000. The market value of the business's assets were $850,000, and the market value of the liabilities were $400,000. Azimuth recorded goodwill of $50,000 at time of acquisition. At the end of 2011, they measured the goodwill and found it.

47) On January 1, Wolfie's Supply sold $222 worth of goods to customer Abe Smith on account. On January 12, Wolfie's collected the amount from the customer. Please record the journal entry for
the cash collection.
48) On January 1, Wolfie's Supply sold $222 worth of goods to customer Abe Smith on.

53) On January 1, 2012, a company buys equipment for $10,000. It has estimated residual value of $1,000, and an estimated life of 5 years. Assume the company uses double-declining-balance depreciation. Please complete the depreciation schedule below.
Depreciation for the Year
Date
Asset Cost
Depreciable Cost
Depreciation Rate
Depreciation Expense
Accumulated Depreciation
Book Value
1-1-
2012
12-31-
2012
12-31-
2013
12-31-
2014
12-31-
2015
12-31-
2016
54) Pallmall Company has a.

Learning Objective 8-5
1) Interest revenue must be reported for a note receivable that is outstanding at the end of the accounting period.
2) The maturity value of a note is the sum of the principal plus interest due at maturity.
3) A note is dishonored when the maker of the note.

51) On January 1, 2012, a company buys a truck for $42,000 cash. It has estimated residual value of $2,000, and an estimated life of 4 years, or 200,000 miles. Assume the company uses straight-line depreciation. Please complete the depreciation schedule below.
Depreciation for the Year
Date
Asset Cost
Depreciable Cost
Depreciation Rate
Depreciation Expense
Accumulated Depreciation
Book.

11) Which of the following is a liability created when a company receives cash for services to be provided in the future?
A) Unearned revenue
B) Accrued liability
C) Service revenue
D) Estimated warranty payable
12) Sales revenue for a sporting goods store amounted to $215,000 for the current period. All sales are on account.

24) Charlton Sales has a receivable for $92 that they now deem to be uncollectible. Charlton uses the direct write-off method. Please provide the journal entry for the write-off.
Learning Objective 8-4
1) A credit card processing company generally uses one of two methods of payment—the net and the gross method.
2).

29) Franconia Sales offers warranties on all their electronic goods. Warranty expense is estimated at 2% of sales revenue. In 2013, Franconia had $500,000 of sales. In the same year, Franconia paid out $7,500 of warranty payments. Which of the following is the entry needed to record the disbursement of.

Learning Objective 9-1
1) The cost of razing a building on a parcel of land to build a new building is added to the cost of the land.
2) The cost of excavating a basement for a new building is added to the price of the land.
3) The cost of land.

52) A newly created design business called Smart Art is just finishing up its first year of operations. During the year, there were credit sales of $40,000 and collections of $36,000. One account for $650 was written off. Smart Art uses the aging-of-accounts method to account for uncollectible account expense,.

Learning Objective 9-5
1) On January 1, 2013, Portwell Company purchased a patent for $200,000. They estimate a useful life of 4 years. At the end of 2013, the Patent account will have a debit balance of $200,000 and there will be a credit balance in the Accumulated Amortization account.

4) Asset impairments occur when the asset's value has a significant decline, outside of normal depreciation.
5) Tangible assets must be tested for impairment at least once a year.
6) An asset impairment will be reflected by an increase in the book value of an asset as shown on the balance sheet.
7).

Learning Objective 8-6
1) The acid-test ratio appears in the current assets section of the balance sheet.
2) Accounts receivable amounts are generally shown on the balance sheet net of the allowance.
3) The acid-test ratio is computed as current assets divided by current liabilities.
4) Days' sales in receivables is the ratio.

5) Which of the following is the expense resulting from a decline in the utility of natural resource?
A) Depletion
B) Amortization
C) Depreciation
D) Obsolescence
6) Which of the following accounting methods is the method used to compute depletion?
A) Straight-line
B) Declining-balance
C) Units-of-production
D) First-In, First-Out
7) Navajo Mining Company purchased a mine in 2013 for $3,400,000. .

21) The decline in value of a copyright is accounted for by:
A) depreciation.
B) amortization.
C) depletion.
D) deterioration.
22) Which of the following assets is NOT an intangible asset?
A) Patent
B) Goodwill
C) Building
D) Trademark
23) The type of intangible asset related to the rights to original music and media is a:
A) goodwill.
B) trademark.
C) copyright.
D) patent.
24).

9) Warranty expense would be included in the operating expense section of the income statement.
10) A certain contingent liability was evaluated at year-end, and considered to have a remote possibility of becoming an actual liability. If the accountant decided NOT to report it on the balance sheet or in the.

14) Which of the following depreciation methods allocates an equal amount of depreciation to each year?
A) Units-of-production
B) Straight-line
C) Declining-balance
D) Double-declining-balance
15) Which of the following depreciation methods allocates a fixed amount of depreciation to miles driven, hours used, or some other measure of the asset's utilization?
A) Straight-line
B) Declining-balance
C) Units-of-production
D) Double-declining-balance
16) Which.

38) At January 1, Davidson Services has the following balances:
During the year, Davidson has $104,000 of credit sales, collections of $100,000, and write-offs of $1,400. Davidson records Uncollectible accounts expense at the end of the year using the percent-of-sales method, and applies a rate of 1.1% based on past history.
Prior.

43) Barnhart's sold a piece of restaurant equipment to another restaurant on July 1, 2013 for $1,100 cash. The equipment originally cost $12,000, had an estimated life of 20 years, and an estimated salvage value of $2,000. Barnhart's had recorded total depreciation of $9,000 through the end of 2012, using.

21) Which of the following items is included in the journal entry if a company sells equipment at a price less than its book value?
A) A debit to Equipment for its book value
B) A credit to Gain on sale of equipment
C) A debit to Loss on sale of equipment
D) A.

11) A plant asset is sold for $1,000. Original cost was $9,000, salvage value was estimated at $200, and useful life estimated at 12 years. At time of sale, accumulated depreciation was $8,500. The sale resulted in a loss of $500.
12) A company purchased equipment for $100,000 in 2012. The.

24) On January 1, 2013, Zane Manufacturing Company purchased a machine for $40,000. The company expects to use the machine a total of 24,000 hours over the next 6 years. The estimated sales price of the machine at the end of 6 years is $4,000. The company used the machine.